Energy consumers and energy companies: A question of trust
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Edward Langley, Head of Environment Research at Ipsos MORI, presented at npower’s first ‘Energy Explained’ event. This first event, and the accompanying report, is entitled The Changing Cost of ...

Edward Langley, Head of Environment Research at Ipsos MORI, presented at npower’s first ‘Energy Explained’ event. This first event, and the accompanying report, is entitled The Changing Cost of UK Energy and looks as the costs drivers behind domestic energy bills and forecasts changes in these costs between now and 2020. Edward spoke about consumers’ relationship with energy companies, the extent to which consumers trust energy companies and how this can be improved.

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Energy consumers and energy companies: A question of trust Presentation Transcript

  • 1. Version 1 | Internal Use Only© Ipsos MORI Public Use Paste co-brand logo here Energy consumers and energy companies: a question of trust? Edward Langley, Head of Environment Research, Ipsos MORI 16/07/2013
  • 2. Version 1 | Internal Use Only© Ipsos MORI Base: 982 British adults 18+, 31st May – 11th June 2013 Source: Ipsos MORI Issues Index Issues facing Britain: June 2013 What do you see as the most/other important issues facing Britain today? 50 35 32 26 19 15 15 14 12 11 Top mentions % Economy Race relations/Immigration Inflation/Prices NHS Unemployment Crime/Law and order Pensions/benefits Education/schools Change since May: +1 +1 +2 0 +8 +4 +2 +1 +2 +5 % Position Poverty/Inequality -3 Defence/international terrorism +1 -1 +3 +5
  • 3. Version 1 | Internal Use Only© Ipsos MORI Please tell me the extent to which you trust or distrust energy suppliers to be open and transparent in their dealings with customers? More than half disagree the government has the right objectives and priorities for their sector Base: All Public Sector Leaders who understand the Government’s objectives and priorities (321) 27 June – 22 July 2011 Source: Ipsos MORI Over four in five consumers are concerned about their energy bills Over four in five consumers (84%)* are concerned about their household energy bills Base: GB adults aged 18+ who are at least partly responsible for paying household energy bills: (2,159) 5th and 20th October 2012 Source: Ipsos MORI / DECC
  • 4. Version 1 | Internal Use Only© Ipsos MORI Consumers views on energy companies are mixed “Supplier] has been fantastic … If I‟ve had a problem with my electricity key, my card or anything they‟ve dealt with it straightaway.” Sticker, Family, C2DE “Mine does Argos points. … suddenly you‟ve got a card and you think, ooh I‟ve got some money on there” Sticker, Family, C2DE “I like the fact that they‟re trying really hard to push the solar panels” Switcher, Family, C2DE “My bills with [supplier] has gone up twice in the last few months and I‟m getting fed up with it because… What we can‟t understand is when we see the prices of the oil going down…” Switcher, Post Family, C2DE “... there‟s no real choice. It might be between Argos or Tesco points but there‟s no real price difference.” Sticker, Post Family, C2DE, “I think there‟s a lack of transparency in their pricing, their structure and in their advertising. “ Switcher, Family, ABC1 Source: Ipsos MORI / Energy UK
  • 5. Version 1 | Internal Use Only© Ipsos MORI 5% 25% 27% 26% 18% 2013 29% trust 6% 28% 26% 26% 13% Please tell me the extent to which you trust or distrust energy suppliers to be open and transparent in their dealings with customers? Consumers‟ trust in energy companies has declined recently Base: All with mains gas or electricity who are responsible for bills; 2-13 March 2012 (1484) 1-14 March 2013 (1433) Source: Ipsos MORI / Ofgem 2012 34% trust
  • 6. Version 1 | Internal Use Only© Ipsos MORI MPs‟ trust has also declined across a number of measures 2 1 45 47 37 15 10 3 1 15 25 17 32 57 59 58 4 3 1 4 16 21 28 Trust completely Tend to distrustTend to trust Distrust completely Q Could you please tell me the extent to which you trust or distrust energy companies in general to do each of the following: Base: All MPs (93), Conservative MPs (38), Labour MPs (44) and Liberal Democrat MPs (8) asked, summer 2012 Keep the lights on in Britain, now and in the future Protect the poor and vulnerable from high energy prices Move as quickly as possible towards lower carbon generation methods To offer genuine competition in energy supply To promote energy efficiency and insulation To be innovative and forward thinking To provide clear information so customers can choose between suppliers Trust Chg „09-‟12 +% Distrust Chg „09-‟12 +% -19 -4 -22 -8 -13 -5 -5 +4 +14 +5 -7 +19 +10 +8
  • 7. Version 1 | Internal Use Only© Ipsos MORI Many consumers have installed energy efficiency measures for a number of reasons Half (49%) of those able to make changes to their property claim to have installed energy efficiency measures in the last 10 years Motivations for undertaking energy efficiency measures include: Consumers do not necessarily appreciate the challenges which lie ahead in terms of rising demand for electricity and the investment required They question why bills should rise to ensure a reliable supply in future; something which is largely taken for granted “I fail to see why we should provide investment, there‟s no additional bonus for us.” “We take it for granted that electricity always works for us. If you compare it to where we are with the internet where it often doesn‟t work and sometimes runs faster, there is a difference.” “We‟re paying enough for what we‟re using at the moment, something‟s got to give. The wages aren‟t going up are they?” Source: Ipsos MORI / Ofgem
  • 8. Version 1 | Internal Use Only© Ipsos MORI Ways in which the energy companies might build trust  Suppliers to use standardised language  Greater transparency in pricing  Positive engagement with consumers to help them find the best deal “With the prices I find it very bamboozling because they‟ll say, oh you can go on this tariff and the first so many kajoules are this price per one and then it goes to this price, but if you use more than that then it drops to this price. And you‟re like, how on earth am I going to work this out.” Sticker, Family, C2DE “I think when you‟ve used a massive amount one year and they can see that‟s what you do and how you use it, they should give you some advice on which tariff would be better for you. Like Vodafone do with the phone, I think that would be ideal.” Sticker, Pre-Family, ABC1 Source: Ipsos MORI / Energy UK
  • 9. Version 1 | Internal Use Only© Ipsos MORI Example of how to build trust: Tariff key facts sheets  Greater transparency as key pieces of information (such as what happens at the end of the term) cannot be hidden from consumers  Improved understanding of the meaning of a tariff as it clearly sets out the constituent parts of a tariff  Improved comparability across different tariffs “This will be great, they won’t only tell their advantages. ... like they never tell you what happens at the end, these are the things you never see online.” “They contain information I wouldn’t easily find at the moment.” “Seems like hard work that will make very little difference to the bank balance at the end of the month.” Source: Ipsos MORI / Energy UK
  • 10. Version 1 | Internal Use Only© Ipsos MORI Public Use Paste co-brand logo here Energy consumers and energy companies: a question of trust? Edward Langley, Head of Environment Research, Ipsos MORI 020 7347 3154; edward.langley@ipsos.com 16/07/2013